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For six years, the Internet Nexus served as my technology blog, but I've since started
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Thursday, November 09, 2006
Microsoft Caves to Universal in Music Deal
Me, in WinInfo:
Sending yet another signal of the same desperation that led to the creation of its Zune music player project, Microsoft this morning announced that it has entered into a highly unusual deal with Universal Music Group. Under the terms of the deal, Microsoft will pay Universal $1 for each Zune device sold; in return, Universal will license its collection of music for sale to the Zune Marketplace online service.It's hard not to get a "doomed from inception" vibe off the Zune. I kind of hope I'm wrong. But I'm pretty sure this is a waste of time.
[ Posted at 6:01 PM | Permalink ]
But wait, you say. Doesn't Universal already keep the majority of income from sales of its music online? And doesn't Universal already license its collection to other online music services, including that owned by market leader Apple? The answer to both questions, of course, is yes. And Apple certainly isn't paying Universal $1 per iPod sold, though one might imagine that Universal tried to wrest from Apple a royalty similar to what Microsoft is paying.
Well, that's how the music industry crumbles when you're Microsoft. Sensing that the software giant was in no position to bargain, given the failure of its previous digital music initiative, PlaysForSure, and the uncertain nature of its new Zune go-it-alone approach, Universal demanded the per-player royalty payment. The deal comes "after weeks of tense talks."